Lenders to Increase Lending to Commercial Property Sector – Savills

Until the recent research conducted by Savills was published, the UK property industry was concerned over the slow recovery of the sector as banks did not express any willingness to lend more than they did.
However, according to the survey performed among 100 British lenders by Savills, UK lenders have become more interested in lending to commercial property objects as they started to offer good yields upon the stabilisation of financial markets.
The previous survey, conducted by Savills in March 2009, showed that only a dozen of UK banks were willing to lend more than £100 million to the commercial property sector.
Mr. William Newsom, who takes the post of head of valuation at Savills UK, however, said that the new survey clearly indicates that at least 6 other British lenders do demonstrate such intentions this time. Evidently, they will act prudently, targeting only top quality properties, which are, by the way, quite rare on the UK property market.
Mr. William Newsom also said he is quite surprised that no foreign lenders are entering or looking to enter the UK mortgage market, which seems to offer extremely favourable conditions. Earlier, the Savills research showed that when foreign lenders and UK-based opportunities funds started to “invade” the UK mortgage market in March-June 2009, the number of traditional UK lenders willing to finance the property industry almost doubled.
The situation has not significantly changed since then; German banks, such as Deutsche Postbank, are still the top commercial property lenders (48%). The 12 British banks willing to finance the commercial property (the latest Savills research, however, showed that this figure has now risen to 23) include Barclays, RBS, HSBC, and Lloyds.